Indian government on ropes as ally quits

AFP, NEW DELHI

Thu, Sep 20, 2012 - Page 6

Indian Prime Minister Manmohan Singh yesterday scrambled to save his government after a key coalition partner quit, raising the prospect of early elections and undermining his reform drive.

The regional Trinamool party said late on Tuesday it had decided to withdraw support from the Congress party-led coalition in a move analysts and its opponents said could cause the government to fall before the next elections due in 2014.

Trinamool’s six ministers would submit their resignations tomorrow and its 19 MPs would cease to offer support in parliament, the party’s firebrand leader, Mamata Banerjee, told reporters late on Tuesday.

Singh held talks with his Congress party boss Sonia Gandhi as well as senior Cabinet figures yesterday to discuss how to respond to the crisis caused by a string of economic reforms unveiled last week, a source in his office said.

“They will stand by the reforms,” he said, asking not to be named.

The United Progressive Alliance II coalition (UPA II) is dominated by Singh’s Congress party, but has been dependent on Trinamool for a majority in parliament.

“Our ministers will go to Delhi to resign. We will not stay in UPA II,” Banerjee said after a meeting in the party’s Kolkata stronghold.

The policy changes unveiled last week include allowing in foreign direct investment from retail giants such as Walmart and Tesco, as well foreign airlines, and a 12 percent hike in the price of subsidized diesel.

The number of subsidized gas bottles available to households was also cut in half as the government attempted to repair its badly strained finances, which have caused concern for investors and ratings agencies.

The government’s opponents were quick to latch on to the split as a sign that Singh’s days were numbered.

“The beginning of the downfall of the UPA government has started,” said Ravi Shankar Prasad, spokesman for the main opposition Bharatiya Janata Party (BJP).

Congress insiders believe they will be able to stitch together a majority in parliament when it reconvenes in November by calling on other regional parties such as the Bahujan Samaj Party from northern Uttar Pradesh state for support.

However, observers said the prospects of the government making good on pledges to enact further reforms had been severely diminished and its term could be short.

“If the impression of a lame duck government deepens, it can only alter estimates about the longevity of the regime,” the Times of India said.

“Bolder reform moves, pressing ahead with critical legislation such as banking, insurance and pension reforms, is an uphill task. Another fuel hike seems improbable,” it said.

B.G. Verghese, an analyst at the Delhi-based Centre for Policy Research, agreed that the odds on early elections had shortened, but questioned whether it was really in the opposition’s interests to go for the jugular.

“Mamata Banerjee’s decision has raised the chances of an early election, but whether this will benefit the opposition remains an open question,” he said.

“For all the bravado spouted by politicians, currently no political party is ready for an election. The economy is in trouble, things look very uncertain, it is not the best time to go in for an election,” he said.